India Shies Away from the OBOR Party

Chinese President Xi Jinping’s highly-choreographed One Belt One Road Summit in Beijing last weekend, touted as China’s “grand coming out globalization party,” saw attendance from presidents, prime ministers and global leaders from 28 countries. However, one country was conspicuous by its absence from the megawatt show: India.

The event was aimed to map out China’s ambitious new Silk Road project, of which the OBOR is an integral part. The scheme was proposed in 2013 by Xi to promote a vision of expanding links between Asia, Africa and Europe. China has earmarked US$40 billion for a special fund for the scheme, on top of the US$100 billion capitalization for the China-led Asian Infrastructure Investment Bank, many of whose projects will likely be part of the initiative. The OBOR’s wingspan is expected to include 68 nations from China through Southeast and South Asia to Africa and Europe.

The project appears alluring for most participating countries. Russia sees merit in it because of its tempestuous relations with the West. As expected, President Vladimir Putin was a leading presence at the OBOR Forum. European countries, faced with economic headwinds, are also looking for potential economic opportunity. Capital-deficient Asian countries, meanwhile, are finding it tough to resist the surplus Chinese capital.

However, India took an uncharacteristically bold foreign policy stance by turning down China’s invite. Though China was extremely keen that India attend, New Delhi’s answer was an unambiguous thanks but no thanks. Since, Chinese scholars have been issuing dire warnings on how India would be isolated as most Asian nations as well as the US and Russia are on board.

India’s objections are rooted on the fundamental issue of its sovereignty and territorial integrity, which it says have been violated due to the project. “We have some serious reservations about it because of sovereignty issues,” Indian Finance Minister Arun Jaitley said crisply in Japan earlier this month.

India also feels that that the project is riddled with shortcomings. As presently structured, policy pundits feel, OBOR will basically further interests of Chinese banks and Chinese companies while ignoring Indian sensitivities. “Jinping has projected the China Pakistan Economic Corridor as OBOR’s flagship project. But CPEC’s plans are shrouded in secrecy. It appears to be a rapacious penetration of Pakistan’s economy and territory, including that of Pakistan Occupied Kashmir and Gilgit-Baltistan to which India lays claim, by Chinese enterprises and agencies,” says Delhi-based defence analyst Rohit Nadkarni. “This is obviously disconcerting for New Delhi.”

Critics also feel that India’s underwhelming response to China’s grand scheme stems in part from the latter consistently squashing its neighbor’s ambitions to augment its influence at the global high table. Whenever India has lobbied at international forums – whether it be entry to the Nuclear Suppliers Group, permanent membership of the UN Security Council or UN sanctions against Pakistani terrorist Masood Azhar, who has masterminded many attacks against India– Beijing has always opposed it, usually at Pakistan’s behest. Beijing thus offers New Delhi little incentive to be ebullient about bolstering its own causes and crusades especially at the international level, Nadkarni added.

“There’s a lot of skepticism about OBOR,” he said. “Yes, it is the kind of grand infrastructure that sounds impressive but we all know this is basically about China gaining global heft and influence,” said a senior member of the ruling BJP party. “The project will only serve China’s economic interests by supporting its steel and cement industries currently bedevilled by overcapacity.”

India’s non-cooperation is also being linked to Sino-Indian ties, which have hit a new low lately. The unresolved decades-old border dispute, Chinese support for India’s arch-rival Pakistan and New Delhi’s backing of the Tibetan Buddhist spiritual leader, the Dalai Lama which rankles China, have affected bilateral relations.

India’s non-participation at the OBOR summit has also stirred an intense debate back home with views splintered over what Delhi’s response should have been. Not all agree it is a good idea for Delhi to stay away, with critics pointing out the plan aims to link Asia with Europe for trade and other exchanges. By joining, India could benefit from Chinese investment in infrastructure projects, and fast-track its economic development through trade connectivity.

“The shorter-term goal is for China to emerge as the dominant regional power in its neighborhood, where it is already the leading economic light,” said columnist Manoj Joshi in The Hindustan Times. “Linked to this is the compulsion of protecting Chinese maritime commerce, particularly oil, in the IOR. India risks being systematically frozen out of business opportunities in an enlarging area that is integrating with the Chinese economy around the world.”

“If India doesn’t join the project, it will be left out of the economic transformation through the belt and road. India’s apprehension that the initiative will merely serve China’s interests shows that New Delhi underestimates the transformative potential of the project,” said Brij Kakkar, associate professor Institute of Economic Growth, a New Delhi-based think tank. And adds, “With Donald Trump in the White House pursuing an ‘America First’ agenda, it is wise to push for inclusion in China’s grand scheme.”

Splintered views notwithstanding, for the time being at least, Delhi is keeping a safe distance from the OBOR initiative. Perhaps while it’s still undecided, and malleable, China would do well to turn on all its charm on its neighbor to get it onboard the bandwagon. Settling the border disputes with India, reining in Pakistan and structuring OBOR projects in a way that they are mutually beneficial would be a good start.